Investing in the Anchorage Estate at Rockingham-Shoalwaters Suburb

Dear All,

1. Can someone please help to confirm/disconfirm if it it true that the 4x2 bedrooms house at 56, Seawind Drive has been sold for $415,000 and another house at 16 Oylmpic Place being sold for $435,000?

2. What is the latest going price for vacant land in the Anchorage Estate, both for non-lake front lots as well as for lake-front/water-view lots?

3. Looking forward to your kind sharing and contributions, please.

4. Thank you.


regards,
Kenneth KOH
 
Hi Kenneth

How are you? I noticed the other day that the last of the $195,000 blocks advertised on realesate.com has sold and the next price seems to be in the $210,000 - $230,000 range but when I receive my copy of the local paper I will have a look in there and keep you posted.

Kind Regards

Sparky
 
Hi Ken,

Can not see any sold/sales information for 56 Seawind Drive - although no 68 Seawind is under offer and was for sale for $385,000.

Yes, 16 Olympic is for sale but at an asking price of $445,000. Also number 10 Olympic is for sale for $465,000.

Cheers

Paulie
 
Dear Paulie,

1. Thanks for the update.

2. These house sales to be confirmed are all very recent sales of less than a month old which have not been registered with DOLA or/and Rp-Ddata yet.

3. As for the house sale under offer at 68, Seawind Drive which I believe, is most likely a DHA house, if the buyer's name is indeed a certain Mr Shane from Melbourne, then I think the buyer's offer price comes up only to $372,000 instead, even though the house was being advertised for sale at $385,000.

4. As for 16 Olympic Place, I know that it has been offered for sale at $445,000. However, I was being informed that the house "has just been sold" very recently, for only $435,000.

4. For your kind update and further confirmation, please.

5. Thank you.

regards,
Kenneth KOH
 
Dear Paulie,

1 It has been said that the same house in the Anchorage Estate, if it is physically located within the Shoalwater suburb (WA 6169) boundary (as most of the later land releases are), the same house will command a $20,000 - $30,000 price premium over a similar house than if it is physically being located within the Rockingham suburb(WA 6168) boundary (where most of the earlier first 11 Stages of land releases are located).

2. This is because the Shoalwater suburb has historically been a better and more expensive suburb than the Rockingham suburb.

3. Is this true? And are there supporting sale evidences from your side to help confirm/disconfirm this claim?

4. Looking forward to your kind update, please.

5. Thank you.

regards,
Kenneth KOH
 
Kennethkohsg said:
Dear Paulie,

1 It has been said that the same house in the Anchorage Estate, if it is physically located within the Shoalwater suburb (WA 6169) boundary (as most of the later land releases are), the same house will command a $20,000 - $30,000 price premium over a similar house than if it is physically being located within the Rockingham suburb(WA 6168) boundary (where most of the earlier first 11 Stages of land releases are located).

2. This is because the Shoalwater suburb has historically been a better and more expensive suburb than the Rockingham suburb.

3. Is this true? And are there supporting sale evidences from your side to help confirm/disconfirm this claim?

If I had to choose between a random property in Shoalwater and a random property in Rockingham, I'd pick Shoalwater any day.

Shoalwater is a small suburb on the south-western tip of the peninsula between Safety Bay Yacht Club and Rockingham Beach (on the other side of Point Peron). Apart from Safety Bay Road it has no through traffic. No part of Shoalwater is more than 1km to the beach. About 60% is west of Safety Bay Rd and a leisurely 5-10 min stroll to the sand. Housing would mostly be 1950s-70s, mostly brick.

I regard Shoalwater as a quality suburb defined by the bay (bearing the same name). It has less of that 'endless suburbia' look of newer, rawer suburbs like Cooloongup.

The suburb called Rockingham comprises:

a. waterfront houses along Mangles Bay west and east of the old CBD (at one time very modest shacks but now massively redeveloped/redeveloping)
b. the old CBD at Parkin St
c. a light industrial precinct at Dixon Rd
d. a corridor along Read St comprising the high school, the massive Rockingham City Shopping Centre, council chambers and some commnunity facilities (this is the 'new' town centre), TAFE and uni
e. a 1970s housing area immediately west of Read St
f. a newer (1980s-early 90s) housing estate east of Read St opposite the high school
g. Read Street, which splits the suburb, and Ennis Ave to the east, which seperates Rockingham from Hillman

Apart from the homes at a. the average Rockingham house will be 2 or 3 kilometres from the beach and not as easily accessible to it by foot compared to any part of Shoalwater or most of Safety Bay. It is more hemmed in by roads and it is just like a 1970s suburb in any capital city.

Rockingham wins points over Shoalwater for its convenience to Rockingham City Shopping Centre and public transport. Other lifestyle benefits are less than Shoalwater IMHO.

That is Rockingham, the suburb.

But note that, like Frankston (which is sometimes used to cover areas as disparate as Frankston North and Frankston South), Rockingham is often used loosely to mean a much bigger area. In this usage, it encompasses suburbs as disparate as Safety Bay, Waikiki, Cooloongup, Hillman, Port Kennedy, Warnbro and Rockingham itself. This is because, again like Frankston, Rockingham is the local government centre and shares the same name as its core suburb. Hence if someone refers to 'Rockingham' you must confirm whether they mean the entire district or the suburb described above.

Peter
 
I also like Shoalwater, I took my children for a walk on a shallow water to the Penguin island every summer in the last 3 years. I like to own an IP over there one day. The current yield seems very low but future capital gain potential I think is good. My understanding is for older houses around 300K the rent is around 150/week? Is this correct?
 
Dear Tropic,

I think the house rental used to be $150-$175 per week but now it is getting increasingly rarer nowadays.

At the Anchorage Estate, we are starting to see newly completed 4x2 bedroom houses getting around $280-$300 per week as its norm now while at the coastal beachfront unit apartments, some of them are asking as high as $350-$450 per week.

For your kind update, please.

Thank you.

Cheers,
Kenneth KOH
 
Kennethkohsg said:
Dear Paulie,

1 It has been said that the same house in the Anchorage Estate, if it is physically located within the Shoalwater suburb (WA 6169) boundary (as most of the later land releases are), the same house will command a $20,000 - $30,000 price premium over a similar house than if it is physically being located within the Rockingham suburb(WA 6168) boundary (where most of the earlier first 11 Stages of land releases are located).

2. This is because the Shoalwater suburb has historically been a better and more expensive suburb than the Rockingham suburb.

3. Is this true? And are there supporting sale evidences from your side to help confirm/disconfirm this claim?

4. Looking forward to your kind update, please.

5. Thank you.

regards,
Kenneth KOH


Hi Kenneth,

Is it true? I have no idea.

As you know i am a real estate agent, hence have access to some of the sales evidence and am able to answer some of the specific address requests you recently made regarding sale prices and listing prices. However given i live and work in the eastern suburbs of perth - ie Kalamunda Hills area, I don't know rockingham that well and as sure as eggs i ain't driving for an hour each way to eyeball the area and research the area to see if the anchorage is out performing it's neighbouring suburb by $20 - $30 K on similar properties.

I am happy to provide you with updates on reiwa sales and for sale information, but again, as to the physicial location, street sides etc you are going to have to do you your own research.

Sorry not to be of more help.

cheers


paulie
 
Dear Paulie,

1. Thank you.

2. I sincerely value your contributions and inputs, as an RE agent.

3. You are right. That is why I do drive around the Anchorage Estate occasionally, and often on the look-out for new " For Sale" signs being posted there or/and monitor the number of "Sold" signs for my own self-education and research purposes. I will also spend some time talking with some of my neighbours there and trying to be a "busy-body" myself so as to do my own field research.

4. Until my own data has been positively confirmed by another independant source or/and DOLA/RP Data sale data as in this forum, I cannot take these initial reports as highly accurate and reliable. This is part of my own personal due diligence process and data collection to learn more about the Shoalwaters-Rockingham suburbs and the current booming market conditions on a real-time basis.

5. Once I have ascertained my data, I will normally report/share them in this forum for mutual benefits and mutual learning purposes through the subsequent forum discussions being generated. It is how I actually go about to further build up my own self-education process.

6. For your kind update, please.

7. Thank you.

regards,
Kenneth KOH
 
Hi People,

1. I've just received some offers for 2 of my houses in the Anchorage Estate, even though they were not being officially advertised for sale yet, as follows:

a. $335,000 for the house at 17, Broughton Way, Rockingham WA 6168.

b. $465,000 for the house at Lot 1667, 21 FitzGibbon Road, Rockingham WA 6168.

2. Both the offers are above their respective last bank/market valuation prices.

3. Under the current hot market conditions and rising Perth property market trend, such above-market value offers can be expected. It was last widely reported in the Western Australian newspapers in February 2006, when some vendors are known to be asking 10%-20% above their house's true market value.

4. Consequently, I will like to hear out our members' views on these proposed houses sales under today's hot market conditions vis-a-vis further holding one of even both of them for another year and selling them in 2007 when the Perth-Rockingham-Mandurah Railway.

5. It is said that the best time to sell is when we need the monies rather than selling at the market peak. What do members have to say about this?

6. What do members who believe in the long term "Buy-Hold-Never Sell" investing strategies, have to say about the proposed house sales?

7. For members who presently have/owned properties in the same anchorage Estate, what do you personally think and say about the proposed house sales? Your personal honest and specific views will be much appreciated.

8. Looking forward to learning from each of your views before I decide on the house sales, in the immediate near future, please.

9. Thank you.

Regards,
Kenneth KOH
 
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Would you sell in a bullish market? Thats a tough question. I was looking to buy BHP put options at around $27.50 on Friday. Thank god I didn't. This is the same guy who advised a good mate that BHP at $20 is ludicrous. I know I'm not comparing apples here but shows its pretty difficult to pick the top. I read somewhere once that, its a good time to sell if you personally would not pay that kind of price for what ur getting. But if you have nothing else to apply the proceeds to, it gets a bit trickier to stay leveraged and in the market.

Have you factored in a sales cost of 2%-2.5% and CGT of another 8-10%? So really you need to buy something at least 15% below market value just to break even (assuming about 4% purchasing cost on your next property). I suppose the other way to analyse it is you have a 15% buffer or break-even when the party is finally over. Looking at Syd over the past couple of years post boom, theres not many suburbs that has pulled back by more than 15% and most of these are high end suburbs rather than median priced homes.

But in saying that, a lot of investors do sell to release more equity. What would you do?
 
asdf said:
Would you sell in a bullish market? Thats a tough question.
++++++++++++++++++++++++++++++++++++

Dear ASDF,

1. Yes if I seriously think that the possibility of a worldwide financial crisis is a real probability in the immediate near future, one which is likely to occur within the next 12-18 months period.

2.... I am presently weighing this risk now and it is "nagging" at me even though I presently do not have any substantive indicators to sufficiently support this thinking, objectively speaking. It's sort of some personal inner hunch that refused to go away despite the bullishness I see in the present Perth property market.

3. I was lucky the last time round when I managed to sell off my HDB flat in the Singapore property market at its market peak in February 1997, some 5 months just before the Asian Financial Crisis strike in and burst the housing bubble in Singapore then. Today, many of the investors are still suffering from negative house equity despite a 10 years lag period.

4. For your kind update, please.

5. Thank you.

regards,
Kenneth KOH
 
asdf said:
]

Have you factored in a sales cost of 2%-2.5% and CGT of another 8-10%? QUOTE]
*************************************************
Dear ASDF,

1. Yes, I have to also consider 10% GST payment costs on the house sale price as well as I am deemed to be in the business of property development presently. The costs to be discounted, can actually amount to a large chunk of the profits to be made.

2. In fact, I even suggested to Ausprop to consider holding onto his own development properties at this stage of the Perth property market too, myself and to sit back so as to let the profits run further by itself in this present hot bullish property market.

3. For your kind update, please.

4. Thank you.

regards,
Kenneth KOH
 
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asdf said:
Have you factored in a sales cost of 2%-2.5% and CGT of another 8-10%? So really you need to buy something at least 15% below market value just to break even (assuming about 4% purchasing cost on your next property).

I suppose the other way to analyse it is you have a 15% buffer or break-even when the party is finally over.

Looking at Syd over the past couple of years post boom, theres not many suburbs that has pulled back by more than 15% and most of these are high end suburbs rather than median priced homes.
QUOTE]
*************************************
Dear ASDF,

1. I agree with you absolutely.

2. Likewise, I am also asking myself the same quesation:- "Why want to go to invest in Melbourne or Sydney property market now, with a single digit growth when we can still enjoy double digit growth within the Perth Property market within the next 12-18 months?".

3. ... My tentative answer that I have for myself, seems to be that it is better to be safe and prudent in my own property investing by further diversifying and looking eslewhere outside the present booming Perth property market and to look for new opportunties to invest than to continue to invest into this highly priced/"over-valued" market now.

4. What do you further say about this?

5. Thank you.

regards,
Kenneth KOH
 
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asdf said:
But in saying that, a lot of investors do sell to release more equity. What would you do?
********************************************
Dear ASDF,

1. Yes, For safety and prudency related reasons, I also want to cash out and to release more equity from my own property portfolio so as to immediately build up a bigger cash reserve buffer as a contingency fund to weather any financial crisis that may arise within the next 6 -18 months.

2. For these related reasons, I feel more comfortable to cash out 1-2 of my properties out for the time being while holding others beyond 2007 and review them again when the time comes. This is purely for safety and prudency related reasons.

3. However, the temptation to further invest in the Australian property market is also a strong one. If I do not take a position now, I will have to pay a higher entry price subsequently and increase my own costs.

4. Hence, I am presently having mixed feelings over this entire issue.

5. What do you and the other members say?

6. Thank you.

regards,
Kenneth KOH
 
Hi Kenneth

Congratulations on receiving those offers whether you choose to accept or not, it certainly helps to make me feel happy about my own investments on the estate. Ultimately only you can make the decision on what to do but we can all offer our opinions.

When the houses were previously valued was there a difference of $130,000 between the two as with this valuation?

I had expected the price for a 4 bed home of good proportions to be up to $450,000 by the time my 2 were built - at this point both slabs have just gone down so either prices are well ahead of my expectations or the offer on the dearer house is so good that maybe it is worth accepting whilst waiting for the cheaper house to catch up.

Personally I am trying to build/buy and hold properties and not sell at all but it must be very tempting when such good offers come your way.

Good Luck whatever you decide. By the way I have joined up on your website but am not allowed access to your photo gallery at the moment!

Regards
Sparky
 
Hi Kenneth, From the responses, does look like you have a lot of thinking to get through. I suppose we will never know the best course of action. We can only try our best and try to learn from it. You were very lucky to cash out prior to the Asian crisis. Do you think our world economies are at such dire state that it will implode soon? I know you have a hunch that there could be a catastrophic event in 06/07. Apart from a natural world disaster, I can't see the cards crumbling down. Economies are more efficient these days. World imbalances are slowly sorting themselves out as mentioned in numerous speeches by the ex Fed Chairman. Excesses are being consumed and developed economies are chugging along at a healthy 2-3%. There is simply not the kind of volatility as we experienced in previous decades. Financial markets are more rational. Information flow is more immediate and transparent. CEOs are more accountable, cowboys have left the industries, due diligence, due diligence, risk management... the list goes on. There is very little that the world is un-prepared for except as I said a natural catastrophe. Then god help us all.

As for Perth, the signs are all there for the market to continue past Melb median and slowly approach Syd IMO. Money is flowing out like never before and as people get wealthy, housing affordability will increase. I've been told a lot of blue collar guys are now pulling in over six figures. And these are guys only in their 20s and 30s.

Seeing how BHP and RIO has performed this past couple of days, especially after the recent Chinese visit, I think theres a fair bit more steam in this market. The share market is about 6-12months ahead of the curve whereas the property market lags about 6-12 so when you see BHP at $20, the property market will show the end of the resource boom in 12-24 months from there.

On the GST note, I thought it didn't actually come to 10% as you would be claiming credits on the build cost then some kind of margin scheme on the land too? From what a developer told me, he was out of pocket around maximum of 2-3% depending on ultimate sale price.
 
great discussion - raises points that myself and I know many others that develop properties agonise over... as a developer there is no CGT concessions (and it doesn't take much at all to be classed a developer!) plus the GST component means you are paying tax of about 55% on any profits you make. This can be a big whack after doing an exhaustive development over many years. To lose 55% of the profit on a new build really pulls back what the property is worth to you on your balance sheet. On the other hand... is a new build worth its ultimate on the day it is completed i.e. will it suffer zero growth for 12 months or so not unlike driving a new car out of the showroom? and how does that compare to the extra tax that developers pay? Is it better to just pay the tax and create new product? from what I can see, the jury is out. most developers seem to do a bit of both - which to me seems to be a conflict - surely its better to do either one way or the other? or is it risk minimisation? is paying 55% tax a good way of minimising risk and repatriating your profit back to your bank account, or is it better to let it sit there in a depreciating building (arguably) and not realise the gain?
 
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